Good Economy or Bad? Yes

Amidst contradictory economic news, homeowners' wealth is rising.

November 2, 2013

The spectacle of our federal government this fall struggling to fund its operations and pay its bills is only the latest bit of strangeness in what has been a strange time for our country.

The economy has been statistically out of recession for more than four years, yet a majority of households say we are still in a downturn. The Consumer Confidence Index has been rebounding from a low of 45 at the depth of the recession to a figure of 80. But 100 is the point at which more than half of the population says the country is heading in the right direction.

The August unemployment rate of 7.3 percent is an improvement from the rate of nearly 10 percent a few years ago, with 7 million jobs added in the past three years. Still, the economy shed 8 million jobs during the downturn and even today, the employment rate remains stuck at a low of 59 percent.

The housing market and stocks have been among the bright spots. Rising home prices have pushed up net equity holdings by $2 trillion in the past couple of years and stock gains have helped push total household worth to an all-time high, although that wealth is heavily concentrated in a small percentage of the population. 

The most telling evidence of the contradictory nature of our times is reflected in the net worth of home owners versus renters. On average, home owners have a median worth of nearly $200,000, while renters are essentially living paycheck to paycheck, with only $4,000 in net worth on average. And renters as a share of households are growing; their ranks having risen by 6 million from a decade ago.

So, we are living in the strangest of times. Let’s see if 2014 brings us more of the same or something different.

Lawrence Yun
Chief Economist and Senior Vice President of Research at the National Association of REALTORS®

Yun oversees and is responsible for a wide range of research activity for the association including NAR’s Existing Home Sales statistics, Affordability Index, and Home Buyers and Sellers Profile Report. He regularly provides commentary on real estate market trends for its 1.3 million REALTOR® members.

Dr. Yun creates NAR’s forecasts and participates in many economic forecasting panels, among them the Blue Chip Council and the Wall Street Journal Forecasting Survey. He also participates in the Industrial Economists Discussion Group at the Joint Center for Housing Studies of Harvard University. He appears regularly on financial news outlets, is a frequent speaker at real estate conferences throughout the United States, and has testified before Congress. Dr. Yun has appeared as a guest on CSPAN’s Washington Journal and is a regular guest columnist on the Forbes website and The Hill, an “inside the beltway” publication on public affairs.

Dr. Yun received his undergraduate degree from Purdue University and earned his Ph.D. from the University of Maryland at College Park.